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U.S. Newswire
Copyright 2003

Monday, January 13, 2003

EPA Releases Innovative Approach to Cleaner Water; 11 Pilots Receiving More
than $800,000 in Funding

WASHINGTON, Jan. 13 /U.S. Newswire/ -- U.S. Environmental Protection Agency (EPA) Administrator Christie Whitman today announced a new Water Quality Trading Policy to cut industrial, municipal and agricultural discharges into the nation's waterways. The trading policy seeks to support and encourage states and tribes in developing and putting into place water quality trading programs that implement the requirements of the Clean Water Act and federal regulations in more flexible ways and reduce the cost of improving and maintaining the quality of the nation's waters. The policy will help increase the pace and success of cleaning up impaired rivers, streams and lakes throughout the country.

"The Water Quality Trading Policy I am announcing today
recognizes that within a watershed, the most effective and
economical way to reduce pollution is to provide incentives to
encourage action by those who can achieve reductions easily and cost-
effectively," said EPA Administrator Christie Whitman. "Our new
Water Quality Trading Policy will result in cleaner water, at less
cost, and in less time. It provides the flexibility needed to meet
local challenges while demanding accountability to ensure that water
quality does improve."

"Trading can be a cheaper answer to solving water quality
problems in the United States and around the world," said Paul
Faeth, managing director of World Resources Institute. "It creates
a win-win solution for everyone involved and the new policy will
allow states and others to take advantage of the newly created
conservation innovation grants program in the 2002 Farm Bill."

"The States recognize the short and long term benefits of the
approaches by EPA and are pleased that the Agency has formalized an
effective Trading Policy. The Association of State and Interstate
Water Pollution Control Administrators (ASIWPCA) is enthusiastic
about the potential for trading or exchanging pollutant credits. The
process outlined by EPA provides greater flexibility to the States
in addressing extremely complex pollution problems; can result in
significant cost savings; provides an opportunity to regulate
pollutants on a watershed basis; and accelerates pollutant reduction
efforts," said Roberta (Robbi) Savage, Executive Director of
ASWIPCA.

"This policy will provide market-based incentives to encourage
America's farmers, ranchers and woodlot owners and operators to do
even more to maintain and improve the quality of our environment,"
said Natural Resources Conservation Service Chief Bruce Knight. "The
conservation programs in the 2002 Farm Bill will help farmers and
ranchers improve water quality."

Whitman noted that the agency is providing more than $800,000 in
fiscal year 2002 funding support for technical and other support for
11 trading projects around the country. A list of the 11 pilots is
attached.

"Trading can be an important tool for states like Connecticut as
we clean up our waters. Working with New York, Connecticut has
spearheaded the efforts to keep the Long Island Sound clean. This
assistance from the EPA will help Connecticut to continue to improve
the Sound's water quality," said Connecticut Governor John G.
Rowland.

Water quality trading uses economic incentives to improve water
quality. It allows one source to meet its regulatory obligations by
using pollutant reductions created by another source that has lower
pollution control costs. The standards remain the same, but
efficiency is increased and costs are decreased. Under the policy
announced today, industrial and municipal facilities would first
meet technology control requirements and then could use pollution
reduction credits to make further progress towards water quality
goals.

In order for a water quality trade to take place, a pollution
reduction "credit" must first be created. EPA's water quality
trading policy states that sources should reduce pollution loads
beyond the level required by the most stringent water quality based
requirements in order to create a pollution reduction "credit" that
can be traded. For example, a landowner or a farmer could create
credits by changing cropping practices and planting shrubs and trees
next to a stream. A municipal wastewater treatment plant then could
use these credits to meet water quality limits in its permit.

Joining Whitman at today's press conference were: Bruce Knight,
Chief, Natural Resources Conservation Service, U.S. Department of
Agriculture; Paul Faeth, Executive Vice President and Managing
Director, World Resources Institute (WRI); Thomas Morrissey,
Director of Planning and Standards, Connecticut Department of
Environmental Protection and Immediate Past President, Association
of State and Interstate Water Pollution Control Administrators; and
Thomas R. "Buddy" Morgan, General Manager, Water Works and Sanitary
Sewer Board, Montgomery, Al., and Board Vice President of the
Association of Metropolitan Sewerage Agencies.

The policy could save the public hundreds of millions of dollars
by advancing more effective, efficient partnerships to clean up and
protect watersheds. The policy encourages incentives to maintain
high water quality where it exists as well as restoring impaired
waters. In addition, the policy describes provisions of credible
trading programs that are consistent with the Clean Water Act and
federal regulations.

An independent study of three watersheds in Minnesota, Michigan
and Wisconsin looked at the cost of controlling phosphorous loadings
(World Resources Institute 2000). This study found that the cost of
reducing phosphorous from controlling point sources -- traditional
pipe-in-the water dischargers regulated by the Clean Water Act -- to
be considerably higher than those based on trading between point and
non-point sources which are not regulated by the Clean Water Act.

For more information log on to EPA's Trading website at http://
www.epa.gov/owow/watershed/trading.htm.

Water Quality Trading Projects

In addition to releasing its final policy on water quality
trading, EPA is supporting 11 trading projects to address a range of
water quality challenges across the country. EPA supplied over
$800,000 in fiscal year 2002 funding support and EPA Regional
offices are providing technical and other support to the projects.

Trading to Reduce Nitrogen Loads in the Chesapeake Bay Watershed -
- Conestoga River, Penn. A project to reduce nitrogen loads in a
Chesapeake Bay tributary and strive for additional environmental
benefits such as creation of habitat.

Create an Electronic Marketplace for Nutrient Trading in
Chesapeake Bay. Develop an internet-based board of trade for
nitrogen trading in the Chesapeake Bay watershed, with the potential
to be adapted for other watersheds.

Outreach on Trading to the Agricultural Community. Through a
partnership with the National Association of Conservation Districts,
provide information to extension agents and agricultural producers
on the concept, mechanics and potential benefits of water quality
trading.

Trading to Reduce Selenium Loads to the Lower Colorado River.
Develop trading framework aimed at reducing high selenium levels in
tributaries to the Lower Colorado River requiring a Total Maximum
Daily Load (TMDL). Selenium loads in the tributaries come from
point sources and (mainly) nonpoint sources such as irrigation
flows.

First-Year Assessment of Nitrogen Trading in Connecticut.
Evaluate the first year's implementation of a trading program among
79 wastewater treatment plants to meet a nitrogen TMDL in Long
Island Sound. Project will assess nitrogen reductions achieved, the
utility of a watershed permit used for the 79 facilities, and the
potential for expanding the program to include nonpoint sources.

Trading to Reduce Impacts from Urban and Agricultural Runoff near
Montgomery, Alabama. Project to explore trading's potential to
reduce sediment pollution and create additional environmental
benefits in the Coosa and/or Tallapaloosa Rivers.

Pilot Feasibility Assessment of Trading to Reduce Mercury Loads
to the Sacramento River. The Sacramento Regional Wastewater
Treatment Plant has a National Pollutant Discharge Elimination
System (NPDES) permit that requires the plant to develop a proposal
for reducing mercury discharges to the watershed from sources that
are either not regulated or cannot be readily controlled. This
pilot project supports the Sacramento Regional Country Sanitation
District's efforts to assess the feasibility of achieving net
reductions in mercury loadings through such offset actions.

Increasing In-Stream Flow in the Upper Charles River Watershed,
MA. This project seeks innovative ways to address problems of water
quality and reduced in-stream flow in the Charles River by exploring
the option of wastewater treatment plants taking actions upstream to
increase groundwater recharge and decrease stormwater runoff in lieu
of increasing treatment capacity downstream.

Evaluate Feasibility of Reducing Acid Mine Drainage in the Cheat
River, W. Va. This stakeholder-driven project will assess the
potential for trading to achieve greater reductions in acid mine
drainage pollution than would be achieved under current NPDES
permits through actions to abate drainage from abandoned mines.
Project outcomes will be tied to improved ecological conditions in
the Cheat River.

Nitrogen Trading in the Neuse River Basin, NC. Establishment of
operational guidelines for a trading program to reduce nitrogen
loads from a group of wastewater treatment plants to meet a TMDL.

Pilot Trading Framework for State of Wisconsin. Development of a
trading framework that the State may use to guide development of
future nutrient trading programs in Wisconsin.

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